“Amazon.com is introducing an array of new artificial intelligence and robotics capabilities into its warehouse operations that will reduce delivery times and help identify inventory more quickly.

The revamp will change the way Amazon moves products through its fulfillment centers with new AI-equipped sortation machines and robotic arms. It is also set to alter how many of the company’s vast army of workers do their jobs.”

From Wall Street Journal.

“Dexterity AI’s mobile robot design, called DexR, navigates autonomously to the back of trailers and connects to a conveyor system that feeds packages to the robots directly from the sortation system, the company said. 

The platform’s ‘generative wall planning’ feature takes 500 milliseconds or less to assess billions of wall-build possibilities, Dexterity AI said. The platform’s AI-powered ‘force control’ enables a sense of touch so robots can gently nudge boxes together in creating tightly packed walls.”

From Yahoo Finance.

Thomas Edison developed the original phonograph record in 1877. The first playable records were made from paper pressed between two pieces of tin foil.

On March 15, 1949, RCA Victor became the first label to roll out 45 rpm vinyl records. They were smaller and held less music than the popular 78s and were printed in different colors. Rolling Stone notes, “Teenagers of the Fifties took to the portable, less-expensive format; one ad at the time priced the records at 65 cents each. One of rock’s most cataclysmic early hits, Bill Haley and the Comets’ ‘Rock Around the Clock,’ sold 3 million singles in 1955.”

Unskilled workers in 1955 were earning around 97 cents an hour. This puts the time price of a song at 40 minutes of work.

Apple launched the iTunes Store on April 28, 2003, and sold songs for 99 cents. By this time, unskilled wages had increased to $9.25 an hour. The time price of a song had dropped 84 percent to 6.42 minutes of work. Listeners in 2003 got six songs for the price of one in 1955.

Apple Music launched on June 30, 2015. Today a student can get access to 90 million songs for $5.99 a month. Unskilled workers are earning around $14.53 an hour, so the time price is around 25 minutes of work. Users stream as well as download albums and tracks to devices for offline playback. If a typical song runs three to four minutes, you can play 12,342 songs per month. The time price per song is around one-eighth of a second of work. 

For the time it took our grandparents to earn the money to buy one song in 1955, we get 19,750 songs today. Since 1955, personal music abundance has been growing around 15.9 percent a year, doubling in abundance every 4.5 years.

All of the products we enjoy today are the culmination of billions and billions of little bits of knowledge that humans discover and then share with the rest of us in free markets. Create a song and share it with the planet. We can lift ourselves up and make life better for one another.

Do we still have problems? Of course we do. And we will always face challenges. But look at what we have accomplished in the last 200 years. This is what happens when people are free to solve one another’s problems.

You can learn more about these economic facts and ideas in our new book, Superabundance, available on Amazon.

If air conditioning were a medical advance, its developers would have likely received Nobel Prizes for the many lives it has saved and improved. Although largely a first-world phenomenon, air conditioning is belatedly making inroads in less affluent societies. This includes the billions of people living in tropical regions who would benefit the most from air conditioning but where market penetration is less than 10 percent of households. Several studies project that the world could have billions more air conditioners in use by 2050. 

Despite the public health benefits of air conditioning, its expanded adoption is not universally accepted as good news. Critics focus primarily on the negative externalities of a more air-conditioned world, chiefly increases in electricity consumption and attendant greenhouse gas emissions. For this reason, the United Nations, World Bank, International Energy Agency, and many nongovernmental organizations (NGOs) are advocating an agenda that is, at best, ambivalent about the growth of air conditioning. 

The Benefits of Air Conditioning—the American Experience

The United States was the first nation to be heavily air-conditioned and thus provides the best evidence of its benefits. Before air conditioning, mortality rates in much of the U.S. would rise appreciably with the summer temperatures, but this trend has largely been eliminated by the 90 percent market penetration of air conditioning in American residences. In the most comprehensive study of air conditioning and public health to date, “Adapting to Climate Change: The Remarkable Decline in the U.S. Temperature-Mortality Relationship over the Twentieth Century,” Barreca et al. found substantial mortality benefits, especially among the elderly. Under one set of assumptions, the study found that widespread air conditioning has prevented 18,000 heat-related deaths annually in the United States.

Quality of life is also positively impacted by air conditioning. Learning improves substantially when classrooms are air-conditioned on hot days. Similarly, air-conditioning in the workplace enhances productivity.

Globally, the potential benefits could be an order of magnitude greater than those experienced in America, especially considering the nearly 10-fold larger populations living where summers are more intense than in most of the United States but where air-conditioned homes and buildings remain the exception. Lee Kuan Yew, widely considered to be the founder of modern Singapore—one of the relatively few fully tropical nations where air conditioning is common—cited air conditioning as the single largest contributor to its success relative to other countries that have to contend with comparably high temperatures and humidity.

It is worth clarifying that the growing demand for air conditioning is due overwhelmingly to normal summer temperatures experienced in tropical and semitropical regions where air conditioning has yet to take hold. It is not, as many commenters have suggested, demand caused by climate change-induced temperature increases.

The two main impediments to a more air-conditioned world—lack of access to electricity and unaffordability of an air conditioner—are finally receding. The world has at last reached the point of being nearly 90 percent electrified, and the slow march toward full electrification continues. At the same time, average household incomes in developing nations are rising to the point where rapidly growing numbers of people can afford their first air conditioner. 

Thus, the world is at the cusp of widespread availability of air conditioning for those who need it most. However, despite the potential benefits of this global transformation, achieving it is far from a priority with the international community. Climate change is, and in this context the growth of air conditioning is seen more as a problem than a solution.

The Perceived Risks of an Air-Conditioned World

Some of the most widely-cited projections come from “The Future of Cooling: Opportunities for Energy-Efficient Air Conditioning,” published by the International Energy Agency (IEA) in 2018. According to the IEA, “of the 2.8 billion people living in the hottest parts of the world, only 8% currently possess ACs.” The agency predicts this presently unmet need will result in an additional four billion air conditioners in use by 2050, with China and India accounting for nearly half that number. The global energy use from space cooling is expected to triple from 2,020 terawatt-hours in 2016 to 6,200 terawatt-hours in 2050 under IEA’s baseline assumptions. Further, since air conditioning use during the hottest times of summer days defines peak demand, IEA projects that the need for electricity generation capacity will increase 395 percent by 2050. Most worrisome to the IEA is its projected near-doubling of greenhouse gas emissions attributable to space cooling from 1,135 million tons in 2016 to 2,070 million tons in 2050.

The agency concludes by warning that “governments of countries with large or potentially large cooling demand need to take urgent action to rein in the growth in energy use for that purpose and limit the potentially large economic and environmental costs that would ensue.”

Both the United Nations and the World Bank largely concur with the IEA’s projections. They also agree on the primary policy prescription—mandatory energy efficiency improvements for air conditioners. Indeed, a sizeable international bureaucracy has sprung up around this issue, involving these organizations as well as national governments, NGOs, and private benefactors. According to the IEA, stringent efficiency standards for air conditioners, coupled with aggressive decarbonization of electricity generation, could not only avoid the projected increase in greenhouse gas emissions from cooling but reduce it below baseline levels to a mere 150 million tons in 2050. The EIA attributes half the emissions declines to more-efficient air conditioners.

The Tradeoffs with Air Conditioner Efficiency Mandates 

The American experience is again illustrative. For decades, the U.S. Department of Energy (DOE) has set and periodically tightened the energy efficiency standards for all types of air conditioners, from window units to central systems. These efficiency standards increase the purchase price of the equipment but save money with use. The DOE has been criticized for setting excessively stringent regulations, and indeed the agency itself concedes that some standards have increased the first cost so much that users may never earn it back in the form of lower electricity costs over the life of the system. Others have also asserted that the DOE understates the extent of efficiency improvements that would occur in the absence of regulations and thus overstates the marginal benefits of arbitrary standards.

In any event, whether or not the added cost of a high-efficiency air conditioner is recouped with use is of no consequence to those priced out of buying the system in the first place. Billions of people in developing countries are finally approaching the point where they can afford their first air conditioner—but just barely. Any nontrivial increase in the purchase price could put air conditioners out of reach for hundreds of millions of households.

For this reason, an affordable but less efficient air conditioner may be better than its costlier but more-efficient counterpart. So long as people can acquire the air conditioner, they can always be judicious about its use—running it only at the very hottest times and not always on the highest setting, etc. But those who can’t afford one in the first place are completely deprived of its benefits. Keeping first costs low should be paramount.

Unfortunately, proponents of arbitrary efficiency mandates have demonstrated a cavalier attitude about affordability. For example, the Rocky Mountain Institute and others sponsored a contest, called the Global Cooling Prize, that rewarded the designers of new ultra-efficient systems that would “counter the climate threat from room air conditioners.” The winning designs were estimated to have a purchase price two to three times higher than a conventional air conditioner. Even assuming these costs would come down over time, they highlight the very real risk of doing more harm than good by depriving many people of air conditioning for the sake of greenhouse gas emission reductions. In addition, the technological complexity needed to increase efficiency—especially if taken to an extreme—can have an adverse impact on reliability and thus add to maintenance costs. 

It is plausible to speculate that the true goal of aggressive efficiency mandates is to limit the spread of air conditioning in developing nations, not unlike measures imposed by the international community restricting the use of other technologies such as pesticides and bio-engineered crops. Whether deliberate or not, air conditioner efficiency requirements will undoubtedly raise first costs and impede market penetration. 

The Kigali Amendment May Add Further Costs

Climate change activists are not only focused on the electricity use from air conditioners but are also concerned about the refrigerants they use. Specifically, hydrofluorocarbons (HFCs) emerged as the class of refrigerants that were used in most systems after the 1987 Montreal Protocol on Substances That Deplete the Ozone Layer placed restrictions on earlier refrigerants targeted for depleting the earth’s ozone layer. Hydrofluorocarbons, though initially hailed as ozone-friendly alternatives, later came under attack as greenhouse gases. Thus, any such refrigerants leaking out of equipment and into the air would contribute to climate change.

While it is true that HFCs, on a per molecule basis, are hundreds, and in some cases, thousands of times more potent greenhouse gases than carbon dioxide, they are on the order of a million times less common in the atmosphere. Overall, the U.S. National Oceanic and Atmospheric Administration puts their current contribution to anthropogenic warming at 1.37 percent.

Nonetheless, in 2016 in Kigali, Rwanda, the Montreal Protocol was amended to place restrictions on HFCs. While it is still too early to tell what the Kigali Amendment’s impact on air conditioning is, it is very likely that the forced switch to less-ideal refrigerants will raise costs. Ironically, the Kigali Amendment may also have an adverse impact on efficiency, as HFCs will be replaced by refrigerants that may prove less efficient in practice.

Conclusion

Much of the international climate agenda risks more economic harm than environmental good, especially for developing nations. In most cases, the tradeoff involves significant energy cost increases from restricting fossil fuels in exchange for speculative and possibly inconsequential future temperature reductions. Here, the tradeoff involves potentially prohibitive cost increases on air conditioning via energy efficiency standards, imposed just as billions more people are on the verge of affording their first air conditioner. It is a deal that should be rejected.